Custom, Excise & Service Tax Tribunal
M/S. Ford India Pvt. Ltd vs Cce & St, Ltu, Chennai on 16 November, 2017
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
E/459/2010
(Arising out of Order in Original No. LTUC/151/2010-(C) dated 28.04.2010 passed by the Commissioner of Central Excise & Service Tax, LTU, Chennai).
M/s. Ford India Pvt. Ltd. Appellant
Vs.
CCE & ST, LTU, Chennai Respondent
Appearance Ms. Sweta Giridar, Advocate, for the Appellant Shri B. Balamurugan, AC (AR) for the Respondent.
CORAM :
Honble Smt. Sulekha Beevi C.S., Member (Judicial) Honble Shri B. Ravichandran, Member (Technical) Date of Hearing/Decision: 16.11.2017 FINAL ORDER No. 42950/2017 Per: Sulekha Beevi C.S. The appellants are aggrieved by the disallowance of input tax credit on the following services stating the ground that the said services do not have nexus with their activity of manufacture.
2. Ld. Counsel, Ms. Sweta Giridar appearing on behalf of the appellants submitted the details of the services, the period involved, the amount involved and the submission in regard to the services which is given in the table below:-
S. No. Description Of Service Period Amount Our Submissions
1.
Landscaping of factory Garden April 2007 To April 2009 Rs.67,94,352
The said services have been availed for planting trees and grass in the open ground available in the premise of the factory. Services were availed to maintain the factory in an eco-friendly manner. Further the Tamil Nadu Pollution Control Board has imposed a condition vide consent order No. TR/TNPCB/F.3226/KPM/RL/W/2008 dated 16.06.2008 that appellant has to develop a green belt in an area of 25% of factory premises In this regard, reliance could be placed on the following judgments:
1. CCE, Chennai v. Rane TRW Steering Systems Ltd., 2015 (39) STR 13 (Mad.)
2. Sri Rama Vilas Services Ltd. v. CESTAT Chennai, 2017 (3) GSTK 24 (Mad.)
3. CCE, Bangalore v. Millipore India Private Ltd., 2012 (26) STR 514 (Kar.)
2.
Renovation And Moderation Of the Canteen located with the factory.
April 2007 to April 2009 Rs.5,75,188/-
The Appellant is bound to provide food to its workers in the factory in terms of Section 46 of the Factories Act, 1948. When the Appellant is statutorily mandated to do so, canteen services becomes directly in relation to manufacture of final product. The Services of Renovation and Moderation of the canteen located within the factory availed by the Appellant is in relation to the Canteen maintained within the Factory. This is also specifically allowed for in the inclusive clause of the definition of input service. Thus, Credit of Renovation and Moderation of the factory is eligible.
In this regard, reliance could be placed on the following decisions:-
1. CCE, Raipur v. HEG Ltd., 2012 (277) ELT 204 (Tri - Delhi)
2. CCE, LTU, Bangalore, v. ACE Designers Ltd. 2012 (26) STR 193 (Kar.)
3. M/s Hindustan Coco Cola Beverages Pvt. Ltd. v. CCE, Nashik, [2017(49) STR 88 (Tri-Hyd)].
4. CCE, Delhi v. Exide industries, 2016 (43) STR 463 (Tri- Delhi ) 3 Facility Management (Real Estate Agents Service ) April 2007to April 2009 Rs.2,81,336/-
The Appellant are Locating suitable houses for executives of company. The said accommodation was provided through real agents. Residential accommodation for Appellants employees, essential for ensuring availability of staff to carry on its business. Further, it is the obligation casted on the Appellant to keep the executives in a comfort zone to extract good result from them. Thus, the said services essential inputs for business and allowable as input services In this regard, reliance could be placed on the following judgments:-
1) Gateway Terminals India Pvt. Ltd. v. CCE, Raigad, 2015 (39) STR 1027 (tri - Mumbai)
2) CCE, Hyderabad v. ITC Ltd., 2013 (32) STR 288 (A.P)
4.
Packers and Movers April 2007 to April 2009 Rs.11,185/-
The Services are availed in relation to the transportation of baggage of the executives of the Appellant. These executives are directly responsible for the production and other business activities of the Appellant. Thus, these are activities which are in relation to the business of the Appellant. In this regard, reliance is placed on the decision of the Honble Bangalore Tribunal in the case of Robert Bosch Engineering and Business Solutions Ltd. v. CCE, Bangalore, LTU, 2017 (51) STR 329 (Tri Bang.), wherein the tribunal has allowed Credit on Services availed for movement of personal baggage of the employee.
3. The Ld. AR, Shri B. Balamurugan reiterated the findings in the impugned order.
4. Heard both sides.
5. At the outset, it has to be stated that the period involved is prior to 01.04.2011 when the definition of input services had a wide ambit as it included the words activities relating to business. The Ld. Counsel has submitted that the gardening activities were availed by them to keep the premises eco-friendly and to comply with the conditions prescribed by the Tamilnadu Pollution Control Board. The decisions relied upon by her have held such services to be eligible for credit during the relevant period. The services for renovation and modernization has been availed in respect to the canteen. Under the Factories Act, 1948 it is mandatory for them to maintain a canteen. Therefore, the services availed for renovation and modernization of canteen in our view is eligible for credit. For this, we also draw sustenance from the decisions relied upon by the Ld. Counsel. It is the case of the appellants that in order to provide accommodation for employees they have availed the services of Real Estate Agents. Further, the services of Packers and Movers were availed by them for transportation of the belongings of the executives of the appellant company when relocated. These are welfare measures for the employees of the company and will fall within the ambit of activities carried out relating to business. In the decisions cited by the Ld. Counsel, the said activities have been held to be eligible for service tax credit. Following the same and taking into consideration the facts and evidence presented before us, we are of the considered view that the disallowance of the credit is unjustified. The impugned order to the extent of disallowing the credit on the services shown in the table above is set aside.
6. In view of the above, appeal is allowed with consequential relief to the appellants.
(Order dictated and pronounced in the Open Court)
(B. RAVICHANDRAN) (SULEKHA BEEVI C.S.)
MEMBER (TECHNICAL) MEMBER (JUDICIAL)
BB
1